Hong Kong, officially known as Hong Kong Special Administrative Region of the People’s Republic of China, is a former British colony that was transferred to China in 1997. With a population of over seven million people, it is the world’s eighth largest trading economy and banking center and has the sixth largest stock market based on market capitalization.
Even though Hong Kong is connected geographically to the mainland of China, it has an entirely different political system. The Hong Kong Monetary Authority (HKMA) is responsible for the government’s monetary and banking stability. The primary financial legislation governing Hong Kong are the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), the Drug Trafficking (Recovery of Proceeds) Ordinance (DTROP), the Organized and Serious Crimes Ordinance (OSCO), and the United Nations (Anti-Terrorism) Measures Ordinance (UNATMO). The AMLO requires due diligence for all financial institutions and includes heavy punishments for breaches.
As an international financial and economic hub, Hong Kong has earned a reputation as being one of the most important cities in the world. InvestHK, the government organization tasked with promoting business opportunities, touts Hong Kong’s strategic location, business-friendly government, low taxes, and world-class business infrastructure.
Despite having such a supportive business environment, the South China Morning Post recently reported that Hong Kong has become “the strictest and most difficult environment in the world to get a bank account.” It can take up to four months to open a new account, if the bank doesn’t refuse to do so outright. Increasingly strict banking regulations have resulted in financial institutions frustrating clients and potential customers with repeated manual compliance checks that sometimes result in businesses choosing to open accounts in Singapore or elsewhere, where it is much easier.
While tougher rules are needed to protect against money laundering and corruption, is there a better way to maintain compliance without driving away clientele from Hong Kong banks?
Online identity verification (IDV) in Hong Kong recently started to become a viable alternative to in-person transactions. In order to maintain customer online due diligence in Hong Kong, financial institutions must verify customer identity using reliable and independent data sources. Trulioo offers a number of reliable and secure data sources for Hong Kong including HKID Validation, public data, and Hong Kong consumer credit bureaus.
GlobalGateway, Trulioo’s online IDV solution, provides fast, reliable, and cost-effective identity verification that minimizes the need for manual verification. As a result, new accounts can be opened more quickly, reducing frustration and speeding up customer onboarding.